(dissenting).
I respectfully dissent. As the majority acknowledges, a good portion of the article focused on Jadwin’s lack of experience in the bond industry, particularly in the management of mutual funds. Such a focus does not constitute an aspersion of character, as the majority correctly concludes.
The majority errs, however, in holding that the alleged corrective statement attributed to Jadwin is defamatory because coupled with the article’s observations regarding the lack of employees, the embossed paper, the address, and the accompanying photograph it creates “a false impression of substance by misrepresenting the circumstances of his federal appointments.” In determining the meaning and effect of an article, the writing must be construed as a whole, without placing undue emphasis on a portion of the writing or taking any word or phrase out of context. Morey v. Barnes, 212 Minn. 153, 156, 2 N.W.2d 829, 831 (1942); Tawney v. Simonson, Whitcomb & Hurley Co., 109 Minn. 341, 352, 124 N.W. 229, 233 (1909). From my reading of the entire article, I am not left with the impression that the corrective statement attributed to Jadwin is defamatory. In my opinion, the majority places undue emphasis on the alleged corrective statement.
The alleged “corrective statement” does not cast an aspersion on Jadwin’s character, at least not to the degree of raising the article to the level of defamation of character. This ground for reversal is too selective when construing it in the context of the article as a whole. I would affirm the judgment of the trial court.
APPENDIX
NEW CITY MUTUAL FUND STAGES ONE-MAN SHOW
By JOE BLADE
Minneapolis Star Staff Writer
A new mutual fund has been started here with a single employee who has no mutual fund experience, corporate directors who also lack experience and an address that actually is the office of a secretarial service.
The fund is called Tax Exempt Bond Fund for Minnesotans Inc. Its prospectus says it will invest 80 percent or more of its money in Minnesota tax-exempt bonds. That would make that proportion of its income exempt from federal and state income taxes for Minnesota residents.
. Its founder, president and sole employee is Thomas Jadwin, 35. Jadwin is soliciting investments in the fund from his apartment at 1910 Burns Ave. in St. Paul.
Similar funds designed to pass interest along to investors have been growing increasingly popular as interest rates have soared. New investment vehicles have been springing up to take advantage of the record rates.
In registering the fund for sale to the public, Jadwin was asked twice by the securities division of the Minnesota Commerce Department to withdraw his application because of his lack of experience in mutual fund management.
But the fund was registered after Jadwin met the security division’s requirements by agreeing to hire an experienced bond broker to advise him and to keep the fund’s expenses within legal limits.
The fund has no office at present. But its printed materials, its advertisements and its embossed stationery give its address as Suite 1414 in the Soo Line Building in downtown Minneapolis.
In fact, Suite 1414 is occupied by Executive Secretary Ltd., a secretarial and telephone answering service that takes Jad-win’s mail and answers his phone calls.
“It’s a brand new company, and I need a mail drop,” Jadwin said. He wanted a downtown Minneapolis telephone number he could use when he did open an office, he said.
Jeff Wartchow, deputy Minnesota securities commissioner, said that use of the address probably was legal. An attorney for the Securities and Exchange Commission in Washington, D.C., agreed.
The mutual fund went on sale Feb. 15 after having been registered with the state *445securities division and the SEC. It will not begin operating unless $1 million of [the] shares are sold within 90 days.
Jadwin most recently was acting deputy director of a division of the National Endowment for the Humanities in Washington, D.C. He has been a consultant with two prestigious national consulting firms and financial manager of the government-created National Center for Housing Management.
In a letter to the state securities division, Jadwin said of his government jobs: “I have been appointed by two presidents (one Republican and one Democrat) to financial and management positions.”
When interviewed, Jadwin said he meant that he had worked in the government during the administrations of two presidents.
The experienced bond broker Jadwin hired at Wartchow’s insistence is Howard Marcotte, a partner in the Minneapolis bond firm of Cronin & Marcotte Inc. Mar-cotte agreed to advise Jadwin on bond purchases and to become a director. He is the only director with professional experience in the bond business.
Neither Marcotte nor Jadwin nor any of the other three directors has worked for a mutual fund. The latter three say they are personal friends of Jadwin and became directors at his request.
When asked if Jadwin was capable of making the investment decisions required, Marcotte replied:
“He will be, with me behind him.”
Jadwin himself says:
“There are probably few people who have more knowledge of the operation of a mutual fund now than me.” He has acquired that knowledge in registering his fund, he said, and in setting up its accounting and preparing its advertisements.
When asked how he would accumulate bonds for the fund, Jadwin said he would consult with Marcotte when money was available and then buy bonds. If they expected interest rates to rise or fall, Jadwin said, he could change the bonds in the mutual fund’s portfolio.
Jadwin also says that his fund is unique. Technically, that is true. But there are other similar investments.
The income from several other bond mutual funds is exempt from federal — but not state — income taxes. And several brokerage houses sell “unit trusts” of Minnesota tax-exempt bonds, which are exempt from state and federal taxation.
A unit trust holds its bonds until they mature. An investor buys a share of that package of bonds. He gets income that includes proceeds from bonds that mature. The brokerage houses that issue unit trusts buy back shares at the current market price of the portfolio, so an investor is not locked in.
Jadwin’s fund has no sales commission, or “load,” a benefit for an investor. But expenses for the fund, at least in its early stages, are expected to bump up against Minnesota’s 2 percent limit.
That means 2 percent of the fund’s assets would be used for expenses and management fees each year. So if bonds in the fund paid 8 percent interest, an investor would actually get 6 percent, after deduction of fees and expenses.